Foreign nationals are legally entitled to purchase real estate in Mexico, and such transactions are routinely completed in practice. Nevertheless, the market remains primarily oriented toward domestic buyers.

The main flow of foreign purchasers comes from the United States and Canada, whose citizens account for approximately 65% of all foreign real estate buyers in the country, with the total number of transactions exceeding 40,000. This trend is largely driven by price differences, while the median home price in the United States is around $400,000, in Mexico it is approximately $90,000.

However, interest in the Mexican property market is not limited to U.S. citizens. There is also significant demand from Europe, particularly from Spain. In any case, entering a new market inevitably involves challenges and nuances related to local legal and commercial specificities.

To prevent these issues from becoming unpleasant surprises, we have prepared a detailed overview of buying property in Mexico and what questions may arise during the process.

Contents:

  1. Specific Features of Real Estate Purchases in Mexico
  2. Housing Prices in Mexico
    1. Real Estate Taxes in Mexico
  3. Step-by-Step Procedure for Purchasing Real Estate in Mexico
  4. Mortgages in Mexico
    1. Insurance for Mortgages in Mexico

Specific Features of Real Estate Purchases in Mexico

Foreign citizens have the right to buy property in Mexico. The law does not require temporary or permanent residency status, and a purchase can be completed even while holding a tourist permit.

To initiate a transaction, a foreign buyer must confirm their identity and legal status in the country by providing:

  • a valid passport;
  • a migration document received upon entry into Mexico;
  • a permanent residential address outside Mexico.

A mandatory requirement for buying Mexican international real estate is obtaining a tax identification number known as RFC (Registro Federal de Contribuyentes). This number is necessary for paying the property acquisition tax, registering the transaction, and fulfilling subsequent tax obligations related to ownership, rental, or resale of the property.

The Registro Federal de Contribuyentes is used for:

  • paying the real estate acquisition tax;
  • registering the transfer of ownership;
  • complying with tax obligations after the purchase.

Mexican law designates special coastal and border zones, defined as areas within 50 kilometers of the coastline and 100 kilometers of the national border. Foreigners can purchase property in these areas, but only through a banking trust known as fideicomiso.

In this arrangement, a Mexican bank becomes the legal owner of the property, while the foreign buyer holds beneficial ownership as the trust beneficiary. The standard duration of a fideicomiso is 50 years, with the possibility of renewal. Establishing such a trust requires separate authorization from the Mexican Ministry of Foreign Affairs (SRE) and the participation of a bank throughout all stages of the transaction.

All real estate transactions in Mexico must be conducted through a notary public. The notary verifies the property title, calculates and withholds applicable taxes, formalizes the deed, and submits the documentation for official registration with the public registry.

Housing Prices in Mexico

The residential Mexico housing market in 2024–2025 was in a phase of moderate growth without sharp price spikes. According to Sociedad Hipotecaria Federal, the housing price index increased by approximately 8.4% year-on-year in the first half of 2025.

As a general benchmark for market values, statistics on completed transactions with mortgage financing are useful. In the first half of 2025, the average price of purchased housing nationwide was about $98,000, while the median price was around $60,000.

In terms of area, the median price amounted to roughly $1300–1400 per square meter. For properties in projects aimed at foreign buyers, prices are typically 10–20% higher. In Mexico City, the average price for new and premium housing was estimated at approximately $2699 per square meter.

Average prices of homes in Mexico by city:

Location

Average price, USD

Mexico City

203,569

Los Cabos, La Paz and other markets in the state

136,737

Querétaro

121,940

Mérida and other markets in the state

117,662

Tijuana and other markets in the state

116,275

National average

97,923

In the first half of 2025, 63.3% of transactions involved secondary housing and 36.7% involved new construction. Over the same period, price dynamics showed growth as follows:

  • secondary housing: +8.6% year-on-year;
  • new housing: +8.2% year-on-year.

Although the market is still dominated by secondary housing, the share of newly built properties has been rising since 2024. In 2024 this segment grew by 3.9%, and in the first half of 2025 by an additional 2.67%.

Average real estate prices in Mexico by property type:

Property type and location

Average/median price per m², USD

Apartment, Mexico

2990

House, Mexico

1336

Apartment, Mexico City

3301

House, Mexico City

1737

Apartment, Cabo San Lucas

3431

House, Cabo San Lucas

3388

The difference between apartments and detached houses reflects demand patterns and development density. The best places in Mexico to buy property such as major cities and resort areas, apartments are generally more expensive per square meter, while houses typically offer larger floor areas and display a wider price range overall.

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Real Estate Taxes in Mexico

Real estate taxes in Mexico fall into several categories that arise at different stages, during purchase, ownership, and sale. Let us begin with the taxes that need to be considered when buying a property.

When formalizing ownership rights, a foreign buyer must pay a property transfer tax. It is also commonly referred to as the acquisition tax, Impuesto sobre Adquisición de Inmuebles, ISAI, or simply transfer tax.

This tax is paid once at the closing of the transaction. The rate varies by state, but typically ranges from 2 to 5 percent of the property value, although in some cases it can reach up to 6.5 percent.

Buyers do not pay this tax directly. Instead, the notary calculates the amount and withholds it at the final stage of the transaction.

After the purchase, the owner is required to pay an annual property tax in Mexico known as predial. It is collected by the municipality, either the city or the state, and is calculated based on the cadastral value of the property in Mexico.

Key features of predial include the following:

  • The rate depends on the municipality and usually falls within a range of 0.05 to 1.2 percent.
  • The average rate in most states is between 0.1 and 0.3 percent.
  • Predial is paid annually, and early payment may qualify for a discount granted by the municipality.

When selling a property, the owner becomes liable for capital gains tax, ISR, Impuesto Sobre la Renta. This is treated as income from the sale of assets, and the applicable rate depends on whether the seller is a tax resident or nonresident and whether any exemptions apply.

For nonresidents, the standard practice is a tax rate of 25 percent on the total sale price without deductions for renovation costs or additional expenses. If the property has been rented out, the rental income is also taxed at 25 percent of gross revenue.

Additional costs when purchasing property in Mexico include the following:

  • Notary fees. The cost of notarial services is not fixed and depends on the property price and the tariff system of the specific state. The typical range is 0.5 to 1.5 percent of the property value.
  • Property registration fee. After signing the notarial deed, the property must be registered in the public property registry. The registration fee is paid separately and usually amounts to 0.2 to 1.0 percent of the property value.
  • Property appraisal. An official valuation is required for tax calculation and transaction processing. It is conducted by a licensed appraiser and typically costs between 300 and 800 dollars per property.
  • Fideicomiso related expenses. If the property is located in a coastal or border zone, the buyer must initially pay between $1000–3000 to establish the trust, plus an annual maintenance fee of $500–1000.

Paying property taxes in Mexico is done annually through the local municipality. Owners can do this in person at municipal offices, at authorized banks, or increasingly through official online portals in major cities.

Depending on the transaction, additional costs may arise, such as:

  • translation of documents into Spanish;
  • preparation of a power of attorney if the buyer is not personally present;
  • certificates confirming the absence of utility debts.

These expenses usually amount to several hundred dollars and rarely exceed $1000 in a standard transaction. Taking all these costs together, a buyer should generally budget around 7–12% of the property price in additional expenses.

Mexico

Step-by-Step Procedure for Purchasing Real Estate in Mexico

The first stage involves determining the ownership structure. If the property is located outside coastal and border zones, the purchase is registered as direct ownership. For properties near the coastline or national borders, a banking trust, fideicomiso, is used.

Before signing any agreements, the buyer prepares a basic set of documents. This includes:

  • a valid passport;
  • confirmation of legal stay in Mexico;
  • a tax identification number, RFC, for calculating taxes and registering the transaction.

If the buyer intends to use financing, this is the stage at which they should begin the process of getting a home loan in Mexico, as banks will require time for preliminary approval, income verification, and property assessment before closing.

In parallel, it is necessary to conduct a legal due diligence review of the property. This typically covers:

  • verification of the seller’s title to the property;
  • confirmation that there are no liens, mortgages, or other encumbrances;
  • checks for outstanding utility debts.

For apartments, additional documentation related to the condominium regime is reviewed, including maintenance fees and the status of communal payments. If the transaction concerns a land plot, it is essential to verify the land category and whether foreign ownership is permitted. Such verification is best carried out through a local attorney.

If the due diligence results are satisfactory, the parties sign a preliminary agreement that establishes the purchase price, payment structure, settlement procedure, and conditions for making a deposit. At this stage, it is particularly important to clearly define the grounds for refunding the deposit and the liability of each party in case of breach of contract.

Prior to closing, an official property appraisal is conducted. Based on this valuation, the notary prepares a final calculation that includes the acquisition tax, notarial and registration fees, and, when applicable, costs related to establishing a fideicomiso.

The final purchase agreement is signed before a notary public. If the buyer cannot be present in person, a notarized power of attorney is used, which in some cases must be apostilled and officially translated.

After the signing, the notary withholds the required taxes and submits the documents for state registration. Until the registration process is fully completed, the buyer should retain all payment receipts and copies of the signed documents.

Mortgages in Mexico

For non-residents without temporary or permanent residency, access to home loans in Mexico is highly limited. Banks generally work either with Mexican citizens or with foreigners who already have resident status.

In 2024–2025, average interest rates on new mortgage loans for individuals ranged from 10 to 13 percent per year. Borrowers with high income and a stable credit history could receive rates at the lower end of this range, while the highest rates were typically offered to non-residents and applicants without a Mexican credit record.

Typical parameters of mortgage loans in Mexico are the following:

  • loan term of 15 to 20 years, occasionally up to 25 years;
  • fixed interest rate for the entire duration of the loan;
  • early repayment is allowed, but conditions depend on the bank;
  • mandatory insurance of the property and the borrower’s life.

Variable mortgage interest rates in Mexico are rare and are not considered a standard product on the Mexican market.

Typical bank requirements for non-residents of Mexico:

  • Initial down payment, or loan-to-value ratio. For non-residents, the minimum down payment is at least 30 percent of the property value, but in practice banks often require 40 to 50 percent.
  • Tax identification number, RFC. The applicant must obtain it before signing the mortgage agreement. Without an RFC, the loan contract will not be executed even if the bank has issued preliminary approval.
  • Migration status. Formally, getting a mortgage in Mexico without isn't forbidden, but banks are significantly more willing to work with clients who hold temporary or permanent residency. For buyers with tourist status, a mortgage is either unavailable or offered only under the least favorable conditions.
  • Proof of income. Banks require documented income for the previous 6 to 12 months. There is no strict minimum threshold, but the monthly mortgage payment should not exceed 30 to 35 percent of the borrower’s monthly income.
  • Age limits. At the time the mortgage is fully repaid, the borrower must generally not be older than 65 to 70 years.
  • Credit history. Within Mexico it must be positive. If the applicant has no Mexican credit history, the bank may request information from the borrower’s country of residence or simply apply less favorable lending terms.

Because of high interest rates and strict banking requirements for Mexico home mortgages, a significant share of real estate transactions in the country are completed without bank financing. Buyers more commonly rely on developer installment plans or make a one-time payment without financing.

Insurance for Mortgages in Mexico

As previously noted, insurance is a mandatory requirement when obtaining a mortgage. Banks usually require insurance not only for the property but also for the borrower’s life.

Рome insurance in Mexico must typically cover risks related to:

  • fire;
  • earthquakes;
  • floods and hurricanes.

The insured amount is linked not to the market value of the property but to its reconstruction cost, which may be lower than the purchase price. Life insurance is used to cover the remaining debt in the event of the borrower’s death. In some cases, banks may also request disability insurance.

When issuing a mortgage, banks generally:

  • do not accept foreign insurance policies;
  • require insurance to be purchased from a Mexican insurance company;
  • or offer their own insurance product integrated into the mortgage.

The insurance process usually runs in parallel with loan approval. The bank provides a list of acceptable insurers or proposes its own policy. The borrower submits the necessary information, after which the insurance company calculates the premium and issues the policy.

The average cost of homeowners insurance in Mexico typically ranges from 0.1 to 0.3 percent of the insured amount.